See you in court: Nvidia challenges EU regulators over AI startup acquisition probe

In 2024, Nvidia successfully acquired AI startup Run:ai after receiving EU regulatory approval, but the process sparked a legal battle over regulatory jurisdiction. The case highlights growing tensions between tech companies and EU regulators over the scrutiny of smaller acquisitions that fall below traditional merger review thresholds.

Key background: The European Commission accepted Italy‘s request to review Nvidia’s acquisition of Run:ai in 2024, despite the deal falling below standard EU merger revenue thresholds.

• The Commission utilized Article 22, a rarely used power allowing it to review smaller acquisitions
• The deal was ultimately approved in December 2024, but Nvidia has decided to challenge the regulatory process

Legal challenge details: Nvidia has filed a lawsuit with the General Court of the European Union, arguing that regulators violated a September 2024 court ruling limiting their merger review powers.

• The lawsuit specifically contests the Commission’s acceptance of the Italian competition authority’s referral request
• Nvidia claims the decision breaches principles of institutional balance, legal certainty, proportionality, and equal treatment
• The case is formally designated as T-15/25 Nvidia v Commission

Regulatory context: The European Commission has increasingly focused on preventing “killer acquisitions” where large companies acquire startups to eliminate potential competition.

• Companies have expressed concerns about regulatory overreach in reviewing deals below standard thresholds
• A landmark court ruling in September 2024 restricted the Commission’s ability to accept referrals for deals lacking a European dimension
• The Italian competition authority’s involvement has raised questions about the scope of national regulators’ powers

Broader implications: While this legal challenge won’t affect the already-approved Run:ai acquisition, a ruling in Nvidia’s favor could significantly restrict EU regulators’ ability to scrutinize smaller tech acquisitions in the future.

• The case represents a critical test of the balance between regulatory oversight and business autonomy in the tech sector
• A successful challenge could limit regulators’ tools for preventing potentially anticompetitive acquisitions of emerging technology companies

Looking ahead: The outcome of this case could reshape the landscape of tech merger regulation in Europe, potentially requiring regulators to develop new frameworks for reviewing strategic acquisitions in rapidly evolving technology markets while respecting legal limitations on their authority.